If you’ve been looking for a home in the Silicon Valley lately, chances are you competing with several other potential home-buyers on the same property. Sounds almost like a few years ago during the dot.com era. But this time, instead of the higher priced properties being snatched up, it’s the lower valued properties that a drawing the attention.
It’s great that the low prices are attracting buyers, but it’s also becoming frustrating when a lot of investors are snatching up the properties with higher-priced offers and paying cash.
A lot of bank-owned or short sale homes are pulling 20 to 30 offers. Most of these homes are in the San Jose area. Homes in the more expensive areas like Los Gatos and Saratoga are not getting as much traffic, but still get multiple offers.
Even though overall prices are starting to stabilize, we are not in a normal market yet. Buyers will have to be patient. It may take 6 to 8 months to get the property your looking for. Our team was able to get a home for one buyer after the initial counter-offer, but it was the 5th or 6th property we had made an offer on. With other clients we weren’t as successful because even though we overbidded, we were passed up because of non-cash offers.
According to Freddie Mac..the 30-year fixed mortgage rate dropped from 5.25 percent last week to 5.22 percent ending August 6th. The 15-year fixed-mortgage rate dropped to 4.63 percent from 4.69 percent and adjustable-mortgages fell to 4.73 percent from 4.75 percent. I would advise buyers to get those loan application in because who knows how long everything will last!
According to the National Association of Realtors, Pending home sales are up for the fifth consecutive month, and it’s been six years since a streak like this. Based on the figures from the Pending Home Sales Index, signed contracts rose 3.6 percent to 94.6 in May. In June of 2008 the figure was 88.7 percent. Some factors that are contributing to the gain are low mortgage interest rates, affordable home prices, and buyers who’ve been waiting for something to change.
Here are the regional figures from the Pending Home Sales Index:
- Northeast: rose 0.4 percent to 81.2 in June and is 5.8 percent above a year ago.
- Midwest: increased 0.8 percent to 89.9 and is 11.6 percent above June 2008.
- South: jumped 7.1 percent to 100.7 in June and is 8.9 percent higher than a year ago.
- West: rose 2.9 percent to 100.4 but is 0.2 percent below June 2008.
This past Tuesday The Treasury Department stated only 9 percent of eligible home owners received assistance from the Government on mortgage loan modifications and foreclosure prevention.
Two of the biggest bank giants not willing to help borrowers were Bank of America and Wells Fargo, which received federal bailout money. Bank of American modified 4 percent of eligible loans, while Wells Fargo only modified 6 percent.
Out of the larger banks that did assist with modifications were JPMorgan Chase & Co., which modified 20 percent, and Citigroup Inc. which modified 15 percent of eligible loans.
